Blackberry 2005 Annual Report Download - page 18

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Investments
Investments classified as available for sale under Statement of Financial Accounting Standards 115 are carried
at market value. Changes in market values are accounted for through accumulated other comprehensive
income, until such investments mature or are sold. The Company does not exercise significant influence with
respect to any of these investments.
Investments are categorized as available-for-sale for accounting purposes. The Company has reviewed its
intent to continue to hold certain investments previously classified as held-to-maturity and has determined
this intent is no longer present. These investments have been reclassified as available-for-sale, and prior
period carrying values have been adjusted to reflect these securities as available-for-sale since acquisition.
This change results in an increase of $5.4 million in the carrying amount of investments at February 28, 2004,
and an increase in other total accumulated comprehensive income of $5.4 million for the year ended
February 28, 2004 (March 1, 2003 – increase of $4.2 million).
The Company assesses, for impairment, declines in the value of individual investments to determine whether
the decline is other-than-temporary. The Company makes this assessment by considering available evidence,
including changes in general market conditions, specific industry and individual company data, the length of
time and the extent to which the market value has been less than cost, the financial condition and the near-term
prospects of the individual investment. In the event that a decline in the fair value of an investment occurs and
the decline in value is considered to be other than temporary, an appropriate write-down would be recorded.
Income taxes
The Company’s deferred tax asset balance represents temporary differences between the financial reporting
and tax basis of assets and liabilities, including research and development costs and incentives, financing
costs, capital assets, non-deductible reserves including components of the NTP provision, and operating
loss carryforwards, net of valuation allowances. The Company considers both positive evidence and negative
evidence, such as developments relating to the NTP matter, to determine whether, based upon the weight
of that evidence, a valuation allowance is required. Judgment is required in considering the relative impact
of negative and positive evidence. The Company records a valuation allowance to reduce deferred income tax
assets to the amount that is more likely than not to be realized. During the fourth quarter of fiscal 2005, with
the resolution of the NTP patent litigation matter, the Company determined that it was “more likely than not”
that it would realize the full amount of the deferred tax asset and reversed its valuation allowance.
Should RIM determine that it is more likely than not that it will not be able to realize all or part of its deferred
tax assets in future fiscal periods, the valuation allowance would be increased, resulting in a decrease to net
income in the reporting periods when such determinations are made.
In fiscal 2004, the Company maintained its previous determination that it still was not able to satisfy the
“more likely than not” standard with respect to the valuation of its deferred income tax asset balance and
recorded a full valuation allowance against the entire deferred tax asset balance.
Research In Motion Limited •Incorporated Under the Laws of Ontario (In thousands of United States dollars, except per share data, and except as otherwise indicated)